18 October 2001 | Robin Parker
The attitude of purchasers towards central and eastern Europe was the single largest barrier to sourcing from these regions, Andy Yearsley, Ford's director of global sourcing development, told delegates at the CIPS conference.
Ford has been developing supply bases in central and eastern Europe for five years. The regions, which include Russia, Turkey and Hungary, will account for a tenth of its £8 billion annual European production by the end of this year.
Yearsley said this has been achieved by establishing local purchasing offices to communicate with companies in the area.
"It's a question of comparing perception and reality," he said. "You cannot buy from these countries from a desk in the UK or Germany. Someone needs to understand the culture and the local business ethics and not take western manufacturing efficiencies for granted."
Eastern Europe, in particular, represented a significant opportunity for automotive manufacturers, he said. "It is increasingly beginning to understand western requirements, even if the technology is a long way behind."
The automotive e-marketplace Covisint, co-founded by Ford, played as integral a part in these regions as any other, he said. "Covisint supports all purchasing activities in any region, and businesses just need Internet access to use it."
The areas bring additional competition to the automotive supply chain, he argued. "Manufacturers there are enthusiastic and not complacent, and can often build parts better than western European suppliers."
Since Ford began sourcing there, western suppliers have increasingly established a presence, Yearsley said. In four years, the percentage of manufacturers that are either joint ventures or wholly owned by western companies has rocketed from 5 per cent to 95 per cent.
He added that if central European companies joined the European Union, they would become more competitive as trade tariffs would vanish, but labour costs might drive up prices.